IN­VEST­MENT IN CLI­MATE CHANGE PROJECTS CRU­CIAL

Prom­ises need to quickly be trans­formed into projects that bankers can sink tril­lions of dol­lars into

African Independent - - BUSINESS -

in­vest­ment looks like – is key to shift­ing bil­lions into cli­matepro­tect­ing ef­forts, he and oth­ers said.

“We’re con­fi­dent the money is avail­able at the scale we need it,” said Ed Wells, a sus­tain­abil­ity ex­pert and head of global mar­kets pol­icy at HSBC Bank in Lon­don.

Right now, “the sup­ply of projects is what’s short, not the sup­ply of money”, he said.

To kick-start a big­ger pipe­line of in­vest­ment-friendly cli­mate projects, in­ter­na­tional bankers and of­fi­cials from Mex­ico, Nige­ria and Colom­bia are meet­ing in Lon­don this week to try to thrash out a first set of ready-to-fund cli­mate projects.

Viet­nam is also par­tic­i­pat­ing in what’s be­ing called the Cli­mate Fi­nance Ac­cel­er­a­tor ef­fort, though as an ob­server.

The aim is to smooth ob­sta­cles in the way to get­ting fund­ing flow­ing, and give coun­try of­fi­cials the chance to ham­mer out a tem­plate for fi­nance-lur­ing projects that can be repli­cated at home – and po­ten­tially used by other coun­tries as well, Dod­well said.

“You can’t green the whole world at the same time. Let’s start with the four coun­tries here to­day,” he said at the launch of a week­long ef­fort at the Lon­don Stock Ex­change.

Juan Car­los Arre­dondo, who works on cli­mate change pol­icy for Mex­ico’s en­vi­ron­ment and nat­u­ral re­sources min­istry, said his coun­try needs about $135 bil­lion to meet its aim of re­duc­ing emis­sions by at least 22 per­cent be­low ex­pected “busi­ness as usual” lev­els by 2030.

That would pay for things such as shift­ing the coun­try to elec­tric ve­hi­cles – in­clud­ing Mex­ico City’s huge fleet of taxis.

Colom­bia wants to pro­tect its An­dean wa­ter sup­plies, get farm­ers bet­ter cli­mate in­for­ma­tion to keep grow­ing in harsher con­di­tions, pro­tect forests and make the coun­try’s en­ergy sup­ply and trans­port sys­tems cleaner.

But “we re­alise that with only pub­lic fi­nance we won’t be able to meet our com­mit­ments”, said Lina Marcela Penuela, of the coun­try’s Min­istry of En­vi­ron­ment and Sus­tain­able De­vel­op­ment.

Mak­ing the kind of changes needed around the world could cost $90 tril­lion, said Roger Gif­ford, chair of the Green Fi­nance Ini­tia­tive, an ef­fort to make Lon­don a leader in cli­mate-friendly lend­ing and in­vest­ment.

But Wells, of HSBC, said twothirds of that is al­ready po­ten­tially avail­able, in the form of pri­vate in­vest­ment look­ing for good projects.

“Most of the money is there if we can just cre­ate the struc­ture to let it flow,” he said.

Po­lit­i­cal and mar­ket changes – from ever-cheaper so­lar en­ergy to an­nounce­ments by coun­tries such as China and France that they will rapidly phase out petrol and diesel ve­hi­cles – are help­ing more in­vestors and bankers see op­por­tu­ni­ties in a green shift, Wells said.

“Fi­nanc­ing the tran­si­tion to the low-car­bon econ­omy is pos­si­bly the big­gest op­por­tu­nity (HSBC) has ever faced,” he said.

More in­vestors also are in­sist­ing on know­ing the cli­mate-re­lated risks faced by com­pa­nies they back, said Stephanie Sfakianos, head of sus­tain­able cap­i­tal mar­kets at BNP Paribas.

As re­al­i­sa­tion of those risks grows among in­vestors and bankers, “it’s a game changer” in terms of where money will flow, she said.

With a string of hur­ri­canes slash­ing across the Caribbean and the US, and cities from Houston to Mum­bai re­cov­er­ing from flood­ing, cli­mate risk is in­creas­ingly easy to see, the ex­perts said.

“Any­one who switches on the TV at the mo­ment feels like they’re in a cli­mate dis­as­ter movie,” Dod­well said.

“What are we go­ing to do about it?” he asked. “The best chance is the im­ple­men­ta­tion of the Paris cli­mate agree­ment... but we’ve got to speed things up.” – Thom­son Reuters Foun­da­tion

Most of the money is there if we can just cre­ate the struc­ture to let it flow

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